TSA warns of “sharply higher” container demurrage charges

TSA warns of “sharply higher” container demurrage charges

TSA warns of “sharply higher” container demurrage charges

   Pick up your container from the terminal fast or you will face “sharply higher” storage charges, the Transpacific Stabilization Agreement (TSA) warned transpacific shippers Friday.
   The warning was issued as many shippers are negotiating renewal of transpacific service contracts for the 2005-2006 season, which starts May 1.
   The transpacific carrier grouping said marine terminals and railroads are imposing “tough new penalties to keep equipment moving and boost throughput.”
   “While carriers are mindful of customers’ needs in isolated situations, it remains in all parties’ long-term interests to eliminate cargo and equipment dwell time wherever possible, to relieve infrastructure congestion, assure equipment availability and control overall supply chain costs,” said Albert A. Pierce, executive director of the TSA.
   The carrier grouping cited numerous changes in pricing taken or considered by port operators on all U.S. coasts, and by railroads to cut the free time allowed for containers in their facilities and raise the demurrage charges for equipment left beyond the free time period. Californian ports are studying various options for reducing free time by a day, possibly calculating it from the time a specific container is discharged from the ship, not the time the entire ship has been discharged. This would cut free time for the first container discharged by up to five days, according to TSA.
   “The message ocean carriers are getting from port and inland rail terminal operators is very clear — time is too tight and space too scarce to warehouse containers,” Pierce said.
   TSA member lines warned that they are being hit with reductions in free time allowed in terminals and higher penalties for exceeding those free-time allowances. TSA did not say whether or how its ocean carriers would pass on the extra charges to shippers.
   At the same time, major railroads have also imposed intermodal container traffic allocation schemes out of port areas, to ensure that container trains do not crowd out bulk coal, agricultural, chemical and other shipments along key U.S. rail corridors, the TSA said.
   “Cargo needs to flow quickly to its ultimate destination or to an off-dock distribution facility; importers and consignees need to take delivery right away and release the container equipment, or face sharply higher storage charges,” the TSA said in a statement.
   TSA noted that Burlington Northern Santa Fe (BNSF) will reduce its free-time allowance to the day of notification plus 24-48 hours for its major intermodal yards, with storage charges of $100-150 per day, effective May 1. Also on May 1, Union Pacific Railroad will raise its existing storage charges $50 per day and introduce a third tier charge of $300 per day for shipments stored more than 11 days; and CSX will increase its charge for shipments left more than 11 days to $200 per day.